Question

Problem 12-9A Condensed financial data of Whispering Winds Corp. follow.

Whispering Winds Corp. Comparative Balance Sheets December 31
Assets		2017			2016
Cash		$ 158,368			$ 94,864
Accounts receivable		172,088			74,480
Inventory		220,500			201,586
Prepaid expenses		55,664			50,960
Long-term investments		270,480			213,640
Plant assets		558,600			475,300
Accumulated depreciation		(98,000	)		(101,920	)
Total		$1,337,700			$1,008,910
Liabilities and Stockholders’ Equity
Accounts payable		$ 199,920			$ 131,908
Accrued expenses payable		32,340			41,160
Bonds payable		215,600			286,160
Common stock		431,200			343,000
Retained earnings		458,640			206,682
Total		$1,337,700			$1,008,910

Whispering Winds Corp. Income Statement Data For the Year Ended December 31, 2017
Sales revenue				$761,382
Less:
Cost of goods sold		$265,502
Operating expenses, excluding depreciation		24,324
Depreciation expense		91,140
Income tax expense		53,469
Interest expense		9,271
Loss on disposal of plant assets		14,700		458,406
Net income				$ 302,976

Additional information:

1.		New plant assets costing $196,000 were purchased for cash during the year.
2.		Old plant assets having an original cost of $112,700 and accumulated depreciation of $95,060 were sold for $2,940 cash.
3.		Bonds payable matured and were paid off at face value for cash.
4.		A cash dividend of $51,018 was declared and paid during the year.

Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Answer 1

Answer-

WHISPERING WINDS CORP.
STATEMENT OF CASH FLOWS (USING INDIRECT METHOD)
FOR THE YEAR ENDED 31 DECEMBER,2017
Particulars		Amount
		$
Cash flow from operating activities
Net Income		302976
Adjustments to reconcile net income to net cash provided by operating activities
Adjustment for non cash effects
Depreciation		91140
Loss on sale of plant assets		14700
Change in operating assets & liabilities
Increase in accounts receivable		-97608
Increase in inventory		-18914
Increase in prepaid expenses		-4704
Increase in accounts payable		68012
Decrease in accrued expenses payable		-8820
Net cash flow from operating activities (a)		346782
Cash Flow from Investing activities
New plant assets purchased		-196000
Long term investments purchased		-56840
Plant assets sold		2940
Net cash Flow from Investing activities (b)		-249900
Cash Flow from Financing activities
Cash dividends paid		-51018
Common stock issued		88200
Bonds paid		-70560
Net cash Flow from Financing activities (c)		-33378
Net Change in cash c=a+b+c		63504
Beginning cash balance		94864
Closing cash balance		158368